Natale; Secretary, Department of Family and Community Services
[2003] AATA 717
•30 July 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 717
ADMINISTRATIVE APPEALS TRIBUNAL )
) No. S2002/387
GENERAL ADMINISTRATIVE DIVISION ) Re Secretary, Department of Family and Community Services Applicant
And
Elizabeth Natale
Respondent
DECISION
Tribunal Deputy President S A Forgie
Deputy President D G JarvisDate30 July, 2003
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
……………
S A FORGIE
Deputy President
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Newstart – overpayment – Departmental recovery – debt caused solely by administrative error –debt waived – special circumstances – departmental error part of special circumstances – Social Security Appeals Tribunal determination disregarded by Centrelink - debt waived – decision affirmed
Social Security Act 1991 sections 1233, 1237A and 1237AAD
Social Security (Administration) Act 1999 sections 68, 100 and 118
Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001Veterans’ Entitlements Act 1986
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Re Trio and Department of Family and Community Services [2002] AATA 865 and (2002) 70 ALD 206
Re Ivovic and Director-General of Social Services (1981) 3 ALN 61
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Riddell v Secretary, Department of Social Security (1993) 30 ALD 31
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Re Secretary, Department of Family and Community Services and Ellis (2000) 59 ALD 593
Re Brittain and Secretary, Department of Family & Community Services [2000] AATA 161REASONS FOR DECISION
30 July, 2003 Deputy President S A Forgie
Deputy President D G Jarvis
1. This is an application by the Secretary, Department of Family and Community Services (“the applicant”) for review of the decision of the Social Security Appeals Tribunal (“SSAT”) dated 16 September 2002 which affirmed the decision of an authorised review officer to raise debts totalling $7,620.83, being Newstart allowance overpaid between 1 November 2000 and 9 December 2001, but substituted a new decision that the right to recover the debt be waived pursuant to section 1237A(1) of the Social Security Act 1991 (“the Act”).
2. The applicant was represented by Mr J Underwood, Departmental advocate, and the respondent was represented by Mr C Roberts of the Welfare Rights Centre (SA) Inc. The respondent and her husband, Mr Vito Natale, gave evidence.
3. The Tribunal received into evidence the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T documents: T1-T20). The Tribunal also admitted the following documents as evidence:
a.Report of Dr Marty Ewer, dated 6 June 2001.
b.Letter from Department of Veterans’ Affairs dated 15 October 2001.
c.Letter from Mr Ron Coxon to Mr Chris Roberts dated 23 June 2003.
d.Letter from Centrelink to Mrs Elizabeth Natale dated 3 January 2002.
e.Letter from Centrelink to Mrs Elizabeth Natale dated 7 February 2002.
f.Back page of two Centrelink letters.
THE ISSUES
4. The issues in this case are whether a debt arising from the overpayment of the Newstart allowance is to be waived under section 1237A(1) of the Act in consequence of administrative error on the part of Centrelink, and also whether there are special circumstances that make it desirable to waive the debt under section 1237AAD of the Act.
THE EVIDENCE
5. Mrs Natale gave evidence that she and her husband had been married for thirty seven years and have three children. She stayed at home to care for her children until the mid 1980’s and then obtained work first in a school canteen, and then for John Martin’s for about ten years until that store closed. She then worked for Harris Scarfe Limited for about two years until March 2000 when she left due to management changes which had occurred at about that time, and she had found that the job was too much for her. Her husband had stopped working not long before then, due to a disability from which he was suffering.
Mrs Natale then went with her husband for a holiday in Queensland to visit her elderly parents, and returned to Adelaide after a couple of months. For some time she and her husband lived on her husband’s Defence Force Retirement and Death Benefits pension (“DFRDB pension”). They found it difficult to manage, because they had previously been receiving income from three sources, but they were then reduced to living on the DFRDB pension.
6. On 1 November 2000, Mrs Natale and her husband went to the Centrelink office at Modbury, and she applied for a Newstart allowance. Neither she nor her husband had ever dealt with Centrelink before. They spoke to one Ms Li from Centrelink, and she asked Mrs Natale various questions. Ms Li then recorded her answers using a computer. Mrs Natale said that she could not remember signing a claim form and had not been shown what had been keyed into the computer. In the course of the interview with Ms Li, she asked Mr Natale whether he was going to apply for a pension. Mr Natale said that he did not know, but did not think that he would qualify because he was getting a pension of about $600.00 per fortnight.
Ms Li then gave Mr Natale a Module P (partner details) form to complete.
7. Mrs Natale returned to the Centrelink Modbury office a few days later and handed in the Module P form which her husband had filled in in the meantime. Ms Li then informed Mrs Natale that her application had been approved, and advised her of the rate of the Newstart which she would receive.
Ms Li told Mrs Natale that it would necessary for her to apply for four jobs a fortnight and to register with employment agencies. She was further told that she would be required to lodge forms with Centrelink and that if she did not do so, or failed to attend an appointment with a prospective employer, she would suffer a penalty in the form of a certain part of her pension being taken away.
8. After the initial appointment, Mr Natale completed the Module P form. He also gave evidence, and he confirmed Mrs Natale’s account of the initial interview with Centrelink, including in particular the conversation relating to his DFRDB pension.
In his evidence, Mr Natale also referred to question 21 of the Module P form which reads as follows:
“Do you currently get any kind of pension or annuity? This includes superannuation pensions, immediate annuities and allocated pensions or annuities from Australia or overseas.”
The options to answer these questions are:
“No.” or “Yes.”
Mr Natale ticked the “Yes” box. This answer leads to the further question:
“Which kind of pension or annuity you get?” (sic)
There are then five different options, one each with a box marked “No” or “Yes”. For four of these five options Mr Natale ticked the “No” box. In the case of the option reading: “a pension paid by the Department of Veterans’ Affairs or Centrelink” Mr Natale did not tick either the no box or the yes box, but put an asterisk against this question and wrote beneath the various options the words “RAAF DFRDB PENSION”.
Mr Natale did this because he did not consider any of the five options applied to his RAAF DFRDB pension.
Mr Natale further pointed out in evidence that the Module P form does not anywhere ask what is the amount of the pension or annuity referred to in question 21. In any event, Centrelink was aware of this because of the conversation which he and his wife had had with Ms Li at the time of the initial interview with Centrelink.
9. Mrs Natale received a Newstart allowance during the period from 1 November 2000 until 9 December 2001. Mr Natale continued to receive a DFRDB pension throughout this period, but Centrelink had not taken this into account in calculating the amount of the Newstart allowance paid to Mrs Natale. During this period, Centrelink wrote to Mrs Natale about her Newstart and we will return to these letters in paragraphs 12 and 29 below.
Late in 2001 Mrs Natale claimed a carer payment, and in processing that application the failure by Centrelink to take Mr Natale’s income into account in relation to Mrs Natale’s Newstart became apparent. On 19 April 2002, debts were raised by Centrelink for recovery from Mrs Natale of $6,770.48 for the period from 1 November 2000 to 31 October 2001, and $850 for 1 November 2001 until 9 December 2001.
10. Mrs Natale sought review of these decisions, and the matter was reviewed by an authorised review officer. This officer acknowledged that the debt arose initially because of an administrative error, in that the information on the Module P form was not followed up. However, he considered that the various notices sent to Mrs Natale about her rate of payment should have alerted her to the problem as they contained information about the income on which the rate was calculated. He concluded that the overpayment was not due solely to an administrative error, and accordingly the right to recover the debt could not be waived.
11. Mrs Natale then applied to the SSAT. The SSAT affirmed the decision to raise the debt, but set aside the decision to recover the debt and substituted a new decision that the right to recover the debt should be waived pursuant to section 1237A(1) of the Act.
The Secretary of the Department subsequently applied to this Tribunal to review the decision of the SSAT.
12. At the outset of the hearing before this Tribunal, Mr Underwood advised that he was instructed to concede that in the circumstances, the overpayment to Mrs Natale was due solely to an administrative error for the period from 1 November 2000 until 30 June 2001, when the amount of her husband’s DFRDB pension was increased by a CPI allowance. Further, Centrelink did not dispute that Mrs Natale had received the Newstart allowance in good faith.
However, subsequent to 30 June 2001, Centrelink had sent letters to Mrs Natale which expressly required her to give Centrelink notice as to changes in circumstances which would affect her payment of the Newstart allowance. Copies of some of these letters were included in the T documents. Mr Underwood referred in particular to one of the paragraphs in these letters under the heading “You must tell us if any of these things happen or is likely to happen”, namely a paragraph reading:
“you or your partner start to receive or stop receiving income, your or your partner’s income changes from the rate last notified or the income shown above is incorrect.”
Mr Underwood contended that Mrs Natale was in breach of her notification obligations arising from such letters, because she failed to notify Centrelink of the CPI increase in her husband’s DFRDB pension. He further contended that if she had complied with her notification obligations, Centrelink would have been made aware of the amount of her husband’s DFRDB pension, and would have reassessed her entitlement to a Newstart allowance.
Centrelink therefore claimed that because of this breach of Mrs Natale’s notification obligations it could not be said, after the date of that breach, that the debt was attributable solely to an administrative error made by the Department. Mr Underwood asserted that the amount of the debt in the period from 1 July 2001 to 9 December 2001 was $3,460.06 according to Centrelink’s calculations. These calculations have not been agreed by Mrs Natale. In view of the Tribunal’s determination in this matter, it is not necessary to determine whether or not this figure of $3,460.06 is correct.
13. The Tribunal notes that according to Mr Natale’s evidence, as at 7 July 2001, his DFRDB pension was $709.88 per fortnight, and the amount of the CPI increase which was subsequently received was $27.22. However, the date when Mr Natale was first advised of this increase in his pension is not clear from the evidence before the Tribunal. He also explained that the DFRDB pension is paid directly into a joint account in the names of himself and his wife.
14. Mr Natale further referred in his evidence to his experience in the RAAF, and to the distress caused to him during his posting in Malaysia at the end of the Vietnam War when he saw wounded service men arriving at the Butterworth base where he was posted.
15. Mr Natale said that after Centrelink had discovered their error in not taking into account his DFRDB pension, and notified Mrs Natale of their intention to recover the amount overpaid, he and his wife were most distressed, and went to see Ms Li again at Centrelink. On that occasion Ms Li said that she was very sorry about what had happened, and that she had not understood what a DFRDB pension was. Mrs Natale confirmed in her evidence that Ms Li made this statement to them on that occasion.
Ms Li further asked whether Mr Natale’s pension had increased, and he said that he could not remember having received an increase, but would go home and look.
He said it was only after he returned home and searched high and low that he found that he had been previously advised of a CPI increase in his pension, and he had filed the relevant notification in his taxation folder with other papers relevant to that year’s tax return.
He said that he attended to any financial matters affecting the family, and had not at any time told his wife of the CPI increase in the pension.
16. Mr Natale further said in his evidence that in January 2001 he applied for a TPI pension. This was eventually approved in October of that year. However, in the intervening period, he was examined by a number of doctors and became extremely stressed. He said he was reluctant to talk about this, but his personal relationship with his wife was very difficult during this period due to outside pressures. His application for a TPI pension, his medical condition and the necessity to see a number of doctors all caused considerable stress, and this was exacerbated by assisting his wife by taking her to job interviews in order to meet Centrelink’s requirements regarding his wife’s Newstart allowance.
17. Exhibit 1 is a medical report relating to Mr Natale from Dr Ewer. In this Dr Ewer describes Mr Natale’s medical and psychiatric history and condition, and concludes that he had a dysthymic disorder and that he suffered from depression and a range of other symptoms which led to significant distress and impairment. He reports that the dysthymic disorder was secondary to his chronic pain emanating from a back complaint which originated in 1973.
18. Mr Natale further referred in evidence to the stress which he and his wife had suffered as a result of the decision by Centrelink to recover the overpayment of the Newstart allowance. He said that he and his wife had not at any time tried to hide his DFRDB pension; they simply did not know that it was relevant. He was extremely angry at the undue pressure being placed on his wife in consequence of a genuine oversight and the snowball effect which had occurred in consequence of Centrelink’s original mistake and the inadequacy of their forms.
19. Mrs Natale referred in her evidence to the grave difficulties in her relationship with her husband during the period from and after January 2001, and said that she had not thought that her marriage would survive. The parties went through marriage counselling, and she herself became depressed and has needed to take medication since December last year for this.
20. Mrs Natale further referred to the financial difficulties which would be entailed in paying back the amount claimed by Centrelink, since she and her husband had spent the money, believing that they were entitled to it.
21. Mrs Natale further said that notwithstanding the decision in their favour by the SSAT, the debt recovery section of Centrelink had deducted from her carer’s pension amounts of $20 per fortnight, and these deductions were subsequently increased to $40 per fortnight, and a couple of months ago Centrelink completely terminated her carer’s pension. She then went to see Centrelink, and was told that the payments had terminated in consequence of their computer program, but her payments would be reinstated. This occurred.
The Tribunal records its grave concern at this turn of events. It is clear that the overpayment occurred originally as a result of administrative error on the part of Centrelink. This was admitted by the Centrelink officer concerned. The SSAT had decided in September 2002 that the debt arose out of an administrative error, that the overpayment had been received by Mrs Natale in good faith, and that the right to recover the debt should be waived. The subsequent recovery action taken by Centrelink notwithstanding these matters is most unfortunate, and exacerbated the difficulties to which Mr and Mrs Natale have been subjected.
THE LEGISLATION
22. Pursuant to section 68(2) of the Social Security (Administration) Act1999
(“the Administration Act”), a person who is receiving a Newstart allowance may be given a notice which requires the recipient to inform the Department of a specified event or change of circumstances. Section 68(2) provides as follows:
“The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:
(a) inform the Department if:
(i)a specified event or change of circumstances occurs; or
(ii)the person becomes aware that a specified event or change of circumstances is likely to occur;
(b)give the Department a statement about a matter that might affect the payment to the person of the social security payment.”
23. Under section 100 of the Administration Act, the relevant social security payment becomes payable to the recipient at the reduced rate on the day on which the relevant event or change of circumstances occurs. Section 100 provides:
“If:
(a)a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b)the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c)the event or change of circumstances occurs; and
(d)the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e)because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced; and
(f)the person’s rate of payment is not reduced before the end of the instalment period for the person that is current when the event or change of circumstances occurs;
the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.”
24. Section 1223 of the Act provides for various circumstances where a recoverable debt arises from the receipt of social security payments. It was amended during the period under consideration in this case by the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001. The effect of the amendment was that from 12 June 2001 section 1223(1) provides as follows:
“Subject to this section, if:
(a) a social security payment is made; and
(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”
Before 12 June 2001, section 1223(1) provided:
“Subject to subsection (1B), if an amount has been paid to a person by way of social security payment or fares allowance on or after 1 October 1997 and:
(a)the recipient was not qualified for the social security payment or fares allowance when it was granted; or
(b)the amount was not payable to the recipient;
the amount so paid is a debt due to the Commonwealth.
Non-recovery of maternity allowance if lack of qualification results from event or change in circumstances occurring after making of payment or from incorrect estimate of income component made in good faith.”
For the purposes of this case, there is no substantive difference between the two sections.
25. Section 118 of the Administration Act provides for the date when various adverse determinations in respect of social security payments take effect. The section relevant to the present matter is section 118(7), and this provides as follows:
“If:
(a)a person whose social security payment is affected by the adverse determination has contravened a provision of this Act or a provision of the 1991 Act (other than an excluded provision); and
(b) the contravention causes a delay in the making of the determination;
the adverse determination takes effect on such day (which may be earlier than the day on which the determination is made) as is specified in the determination.”
26. A debt due to the Commonwealth by a recipient may be waived by the Secretary, pursuant to section 1237A(1) or section 1237AAD of the Act if certain circumstances are in place. Section 1237A(1) is mandatory where a debt has arisen solely due to an administrative error by the Department.
As relevant, these sections provide as follows:
“1237A (1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.”
“1237AAD The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or false representation; or
(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.”
27. It was conceded by Centrelink that the Newstart allowance was received by Mrs Natale in good faith, and this was apparent from her evidence. It is common ground that the debt was raised after the six week period referred to in section 1237A (1A).
WAIVER UNDER SECTION 1237A(1) OF THE ACT
28. Mr Underwood contended that the proportion of the debt arising after 1 July 2001 was not attributable solely to the administrative error, since if Mrs Natale had correctly responded to relevant letters from Centrelink, she would have advised Centrelink of the CPI increase in the DFRDB pension, and this would have alerted Centrelink to the existence and relevance of the DFRDB pension, and would have led to Mrs Natale’s Newstart allowance being calculated on the basis of correct financial information.
It was further contended on behalf of Centrelink that there had been no evidence before the SSAT to the effect that there had been a failure to notify Centrelink of the CPI increase in the DFRDB pension, for this reason this Tribunal should vary the decision of the SSAT.
29. However, even if this Tribunal draws the inference contended for by Centrelink (that is, that disclosure of the CPI increase would have led to the overpayment being discovered) it does not follow in the Tribunal’s opinion that the initial administrative error would have then ceased to be the sole cause of the overpayment. This is because in consequence of Centrelink’s error, both Mrs Natale and her husband honestly, and in the Tribunal’s view in all of the circumstances, reasonably, understood that the DFRDB pension was simply not relevant to Mrs Natale’s entitlement to her Newstart allowance. It remained irrelevant in their minds solely because of Centrelink’s having failed to take any steps in relation to it when Mr and Mrs Natale disclosed it to Ms Li at the interview with her. We are satisfied that Mr and Mrs Natale disclosed that Mr Natale was receiving a DFRDB pension and gave Ms Li an indication of the amount of payment that he received. They took with them to their original interview documents verifying the DFRDB pension and its precise amount of payment and were ready to show those documents to Centrelink. We found that they were not asked for the documents and were not asked for any details about the DFRDB pension. In particular, we find that, contrary to Centrelink’s customary practice when there is an affirmative answer to Question 21 of the Module P form, and in consequence of Centrelink’s administrative error, Mr Natale was not asked to complete a form “I” which would have required him to give details of his income, and nor was Mrs Natale asked for such information.
30. It was against this background that Mrs Natale received letters from Centrelink dated 7 December 2000, 28 February 2001, 2 March 2001 and 8 May 2001. Each of those letters advised Mrs Natale of, among other matters, the information used to calculate the Newstart payment. Among that information, under the heading “Information used for calculating your regular payments”, was shown an amount of $2.12 or a similarly small amount as the “total fortnightly income”. Mrs Natale said, and the Tribunal finds, that the reference to this amount, which clearly did not include her husband’s DFRDB pension, reinforced her understanding that her husband’s DFRDB pension was not relevant. If her income or other circumstances changed, Mrs Natale was told that she had to advise Centrelink within 14 days after the change had occurred. She was also told that she had to tell it if:
“… You or your partner start to receive or stop receiving income, your or your partner’s income changes from the rate last notified or the income shown above is correct.” (T documents, pages 38, 41, 44 and 47)
The letter contained an explanation of the word “income” that was very broad.
Given Mr and Mrs Natale’s evidence and the manner in which Centrelink had disregarded their disclosure of the DFRDB pension and had failed to ask for any further information, we are satisfied that Mr and Mrs Natale did not understand that the income stated in the letters was intended to encompass the income that had already been disclosed or that Mrs Natale had to advise of any change in her husband’s income. They did understand that Mrs Natale had to advise any additional income and, indeed, we find that she did so when she sold a small parcel of Commonwealth Bank shares and when she drew down amounts from her Colonial Mutual Superannuation Fund and a Super Rest Fund. Centrelink’s disregard of the DFRDB pension constituted an administrative error. It continued to pervade the entire understanding of Mrs Natale, and as far as was relevant, Mr Natale, as to what was required of them in their communications with Centrelink as far as the DFRDB pension was concerned. We are satisfied that on the facts of this matter it was the sole cause of Mrs Natale’s not understanding that the reference to “income” in its letters was intended to refer to her husband’s DFRDB pension. It follows that we are also satisfied that Centrelink’s disregard was the sole cause of her not notifying it that the income shown on the letters was incorrect. Consequently, we are satisfied that it was the sole cause of Mrs Natale’s being overpaid Newstart up to 30 June 2001. On behalf of the Secretary, Mr Underwood conceded this much.
31. Mr Underwood did not concede that Centrelink’s initial disregard of the DFRDB pension continued to be the sole cause after Mr Natale received an increase in that pension with effect from 1 July 2001. Centrelink’s letters to Mrs Natale dated 3 July 2001 and 7 November 2001 were written in the same terms as the earlier letters (T documents, pages 50 and 53).
Mr Underwood did not question that Mrs Natale received the overpayment in good faith and, having considered the evidence, we are satisfied that she did so.
Although Mr and Mrs Natale advised Centrelink of the DFRDB pension that Mr Natale received, they never advised Centrelink of the rate at which he was being paid that pension. At most, we find, they had informed Ms Li verbally, in the course of their original interview, of an approximate amount that he was paid. The reason that they had not advised of the rate was due solely to Centrelink’s administrative error in failing to treat his DFRDB pension as relevant. Not having first notified a rate of income because of Centrelink’s treating the DFRDB pension as irrelevant, Mrs Natale had no reason to think that she was required to notify it when her husband’s DFRDB pension increased with the CPI. She had no reason just as she had previously, and continued to have, no reason to think that she needed to advise Centrelink of the amount of income her husband received from the DFRDB pension. We are satisfied that she was led to this position solely by Centrelink’s actions and so solely by its administrative error. Consequently, the overpayment arose as a result of Centrelink’s not taking in account Mr Natale’s DFRDB pension, and this was the sole reason why Mrs Natale did not notify Centrelink of the increase in the rate of that pension after 1 June 2001 to 9 December 2001. For these reasons we are satisfied that the debt should be waived pursuant to section 1237A(1) of the Act.
SPECIAL CIRCUMSTANCES UNDER SECTION 1237AAD OF THE ACT
32. It was contended by Mr Roberts that even if the overpayment was not waived under section 1237A(1) of the Act, the debt should be waived under section 1237AAD of the Act, on the grounds that there are special circumstances that made it desirable to waive, and it is more appropriate to waive than to write off the debt.
33. Mr Roberts made reference in this regard to the initial administrative error; the fact that Mrs Natale and her husband were experiencing serious marital difficulties for which they sought counselling, and which were exacerbated by the problems they had encountered with Centrelink in relation to the subsequent raising of the debt by reason of the asserted non-disclosure of the DFRDB pension; the consequential lack of communication which meant that Mrs Natale was unaware of the CPI increase in the pension and made her reluctant to make relevant enquiries of her husband in any event; the depressive illness from which Mrs Natale was suffering; the stress which Mr Natale was under until his application for TPI status was accepted by the Department of Veterans’ Affairs; the extreme anger and frustration which the Centrelink error and its aftermath had caused to Mr Natale; the fact that a number of the foregoing circumstances applied not only at the time when the Department initially sought to recover the debt, but had continued up until the time of the hearing; and the fact that Mrs Natale suffered a relapse of her depressive condition as a result of the appeal to this Tribunal.
34. The Tribunal notes that Centrelink’s argument based on the failure to comply with the disclosure obligations, and the alternative argument on behalf of Mrs Natale that there are special circumstances which make it appropriate for the debt to be waived pursuant to section 1237AAD(1) of the Act, were not raised before the SSAT. However, as was said in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, at 68:
“The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.”
Further, the Tribunal is not limited to review only the part of the decision sought by the applicant to be reviewed: the whole of the decision is subject to review (see Re Trio and Department of Family & Community Services [2002] AATA 865 and (2002) 70 ALD 206).
35. Mr Underwood referred to Re Ivovic and Director General of Social Services (1981) 3 ALN 61, and in particular to the conclusion that in considering a discretion such as that conferred by section 1237AAD, the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the Act; the decision-maker should keep this dominant principle in mind, but must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created would be unjust, unreasonable or otherwise inappropriate. He further referred to the wider public interest of recovering monies to which a recipient of social security payments is not entitled.
Mr Underwood further submitted that there was nothing unusual in Mrs Natale’s circumstances. Further, Mr and Mrs Natale were not entirely reliant on welfare payments, and had not adduced any evidence as to the level of their financial hardship.
36. The question of what constitutes “special circumstances” has been considered in a number of cases. In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Court of the Federal Court examined “special circumstances” in the context of section 102(1) of the Social Security Act 1947, and said:
“It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given.” (page 674)
The Full Court affirmed the decision of the Administrative Appeals Tribunal under review in that case and expressly approved a passage Re Beadle v Director-General of Social Security (1986) 6 ALD 1, at page 4 in which the Tribunal said:
“The question is whether, when the relevant circumstances of the applicant are looked at in their entirety, they may fairly be described as unusual, uncommon or exceptional….” (emphasis added)
In a later case, Groth v Secretary, Department of Social Security (1995) 40 ALD 541, at page 545, Keifel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:
“would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case …. It would of course follow that if one were to conclude that if something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
In Riddell v Secretary, Department of Social Security (1993) 30 ALD 31, the Full Court of the Federal Court said at page 38:
“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.”
In Secretary, Department of Social Security v Hales (1998) 82 FCR 154, French J said at page 162:
“The evident purpose of s1237AAD is to enable a flexible response to a wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt.”
In Re Secretary, Department of Family and Community Services and Ellis, (2000) 59 ALD 593, the Tribunal decided that departmental error can form part of the factual matrix which gives rise to special circumstances. The Tribunal referred to a number of earlier Tribunal decisions to the same effect, including a passage from Re Brittain and Secretary, Department of Family & Community Services [2000] AATA 161, paragraph 43, reading as follows:
“… section 1237A should not be read in isolation from s1237AAD of the Act, and it is appropriate to consider departmental error in circumstances where it can either be said to be so significant in itself (as in Re Nehma) to give rise to special circumstances, or appears special when put together with all the other circumstances of a case.”
37. The Tribunal further notes that in Secretary, Department of Social Security v Hales (supra), the Court found that financial hardship was not an essential prerequisite for the exercise of the discretion in relation to special circumstances and waiver.
38. Having regard to the above principles, we have considered the evidence in this case. The initial administrative error by Centrelink, if it was not the sole reason, was certainly the predominant reason for the overpayment. It would be unfair if Mrs Natale were to be penalised for not complying with the notice obligations when (if the administrative error was not the sole cause of the breach of the notice obligations) it was the predominant cause of this breach. In so far as Mrs Natale was in error, it was Centrelink’s actions that led her to misunderstand her obligations to notify it of changes in her husband’s DFRDB pension and so to be in error. The increase in Mr Natale’s pension as at 1 July 2001 was in the order of $27.22 per fortnight. That is a very small amount. She did not even know that it had occurred, (although, of course, her ignorance may not have been excusable if she had not misunderstood her obligations in consequence of Centrelink’s initial error). However, Mrs Natale’s omission is far outweighed by the impact that the subsequent events, caused predominantly, if not solely, by Centrelink have had on Mr and Mrs Natale’s health. Mr Natale is a returned serviceman whose condition of Post Traumatic Stress Disorder (“PTSD”) has been accepted as a war-caused condition. Mr Underwood submitted, in effect, that Mr Natale’s condition is irrelevant as he had already had “recognition” for it by having his claim accepted under the Veterans’ Entitlement Act 1986. While Mr Natale’s rights may have been recognised under that legislation, that does not make his condition irrelevant to our consideration. On the basis of the evidence of Mr and Mrs Natale, we are satisfied that it has made life very difficult not only for Mr Natale but also for Mrs Natale as well as for their marriage. It is against a background of that stress and strain that the aftermath of Centrelink’s initial error had to be borne. Many people find themselves in that situation and many people suffer where such errors occur. For Mr and Mrs Natale, the effect of Centrelink’s error was made worse because of Mr Natale’s illness and chronic back pain and the consequent strain under which they were already living. Centrelink exacerbated the position even more by making deductions from Mrs Natale’s carer’s allowance, and then terminating it altogether, in disregard of the decision by the SSAT in favour of Mrs Natale. Taking all these factors into account, and having regard to the principles in the cases to which we have referred, we are satisfied that there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt.
39. It is common ground that if the Tribunal was satisfied that special circumstances existed, the debt should not be written off, but rather should be waived pursuant to section 1237AAD of the Act.
40. The Tribunal accordingly affirms the decision. In view of this decision, it is not necessary for the Tribunal to determine the amount of the debt in respect of the period from 1 July 2001 to 9 December 2001.
I certify that the forty preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie
Deputy President D G Jarvis
Signed: ...(sgd: P. Paczkowski)............….......
P. Paczkowski Associate
Date/s of Hearing 3 July, 2003
Date of Decision 30 July, 2003For the Applicant Mr J. Underwood,
Service Recovery Team, Centrelink
Solicitor for the Respondent Mr C. Roberts
Welfare Rights Centre (SA) Inc
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